Downtown Housing Interest Boosts Plans
Apartment builders in downtown Los Angeles have expanded their development plans because the first batch of new housing to hit the market this summer has met with strong demand.
The busy leasing activity for the first phases of the Medici apartments and the Old Bank District--radically different projects on opposite sides of the central city--has served to attract more attention to the downtown housing market.
Meanwhile, the Los Angeles Community Redevelopment Agency is seeking to increase the number of high-rise apartments on Bunker Hill as well as affordable housing in Chinatown, South Park and other areas.
About 1,000 apartment units are under construction or in the final planning stages downtown--a substantial addition to the inventory of 7,000 or so apartments.
“More people will most likely enter the market,” said Donald Spivack, deputy administrator of the Los Angeles Community Redevelopment Agency. “There has got to be substantial [demand] to put additional units into the system.”
On the western fringe of downtown along the Harbor Freeway, all 92 units in the first phase of the Mediterranean-style Medici reportedly have been leased. The rapid pace of leasing at the Medici--which ultimately will include more than 650 units at 7th and Bixel streets--has prompted developer Geoff Palmer to scour the area for additional sites.
G.H. Palmer & Associates officials were not available for comment.
A mile to the east, developer Tom Gilmore plans to build 300 more apartment units along Spring Street in the wake of strong demand for the soon-to-be-completed Old Bank District in downtown’s long-suffering historical core. Gilmore said he is in escrow to purchase the Rowan and Security buildings at 5th and Spring streets. He plans to build a garage and shops on adjacent surface parking lots.
The additional properties sit immediately south of Gilmore’s Old Bank District, a trio of vintage office buildings near 4th and Main streets that are being renovated into about 250 loft-style apartments. Gilmore said that more than half of the first phase of 70 units due to open in August have been leased at rents ranging from about $800 to $2,000 a month.
Having leases in hand and the prospect of other nearby housing projects made it easier for Gilmore to finance the expansion of the Old Bank District, he said.
“We are shocked and delighted,” said Gilmore, a former New Yorker. “It’s pretty encouraging. We are finally beginning to see the light.”
At 6th and Main streets nearby stands the historic Pacific Electric Building, which developers Chris Hammond and Gerald L. Katell are in escrow to buy and transform into more than 200 apartments. The nearly century-old property--which served as the main terminal for the famed Red Car streetcar lines--has been mostly vacant for a decade.
The project will open in late 2001 if the purchase is completed and financing secured, said Gerald L. Katell, president of Katell Properties.
“The more downtown residential projects you have . . . the more services you will be able to attract,” Katell said. “We just think it makes a lot of sense. We think there will definitely be a market for this.”
In the South Park district near Staples Center, Forest City Residential West Inc. is negotiating with city redevelopment officials to build about 200 housing units at Flower and 11th streets. Construction would begin next spring, pending government approvals.
The demand for new housing is strong enough to fill most of the 1,000 apartment units that are in the works across downtown, said Scott Carlson, vice president of development for Forest City. The firm’s other downtown apartment tower, the Metropolitan, is 95% occupied with monthly rents starting at about $1,000 for a studio unit.
“We think people are coming back to downtowns, and if we supply this kind of housing more people will come,” Carlson said.
